Malik GUL MUHAMMAD AWAN VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance, 2011 PTD-KARACHI-HIGH-COURT-SINDH 2325 (2011)

(a) Sales Tax Act (VII of 1990)---

----Ss.35-A & 48---Suit for recovery of Rs.81.82 millions as damages from officials of Sales Tax Department---Imposition of embargo on plaintiff's factory due to non-payment of tax---Loaded vehicle found by such official while leaving plaintiff's factory without payment of tax---Confiscation of such vehicle and imposition of penalty by authority---Plaintiff's plea that he was bringing some material to his factory in such vehicle, which was forcibly taken over by such officials, who detained him in their Headquarter whole night, where they assaulted, maltreated, manhandled and blind folded hint---Appellate Tribunal set aside such confiscation order while condemning treatment meted out by such officials to plaintiff being a respectable and educated person---Degree for Rs. 1,00,000 passed by trial Court against such official jointly and severally---Validity---Plaintiff had made out a case of maltreatment against him as manner and method in which he was treated by such official was an inhuman activity--Demand of outstanding tax would not give authority and license to such official to maltreat or misbehave with taxpayer---Such official had taken law in their hands with mala fide intention---Plaintiff had based his claim upon damages and special damages worked out on basis of expected losses only and without bringing any exact amount of losses sustained by him---Damages claimed by plaintiff were exaggerated and he failed to prove same through evidence---Suit for damages in absence of actual losses suffered by plaintiff could not be decreed---Plaintiff had suffered mental shock and agony---Such official entrusted with collection of taxes could not resort to harassing, insulting and torturing taxpayers illegally for their personal gratification---Damages awarded to plaintiff by trial Court, though not being complete relief for agony suffered by him, would act as deterrent for such official not to act so future---High Court dismissed appeal while directed such official to pay damages awarded by Trial Court within thirty days, otherwise plaintiff would be entitled to mark up at Bank rate till its realization.

Haji Salman Ali and Co. v. Province of Balochistan PLD 1994 Quetta 13 rel.

(b) Tort---

----Damages, awarding of---Discretion of Court exercisable in view of facts and circumstances of each case---Principles.

(c) Tort--

----Damages, claim for---Essentials---Exact amount of damages suffered by plaintiff and its proof being essential for decreeing such suit---Principles.

If some damages have been caused to a person the same are to be assessed in the exact amount and proved to this extent. Scanty and the claims based on no evidence should hardly entertainable. The courts do not decree those types of damages the exact amount of which cannot be proved. Though damages to be awarded by the rule of thumb and exact amount is not determinable but person making the claim is legally obliged under the law to claim a sum of money as early as possible to the amount of damages suffered by him:

Damages for mental torture, nerves shocks, the losses of livelihood for family etc., cannot be measured in terms of money and as no standard or method can be laid down in this regard, the claims are, therefore to be worked out on a rational basis and not upon the working submitted by a person.

Haji Salman Ali and Co. v. Province of Balochistan PLD 1994 Quetta 13 and Sufi Muhammad Ishaque v. Metropolitan Corporation Lahore PLD 1996 SC 737 rel.

(d) Tort---

----Damages, claim for---Burden of proof---Person claiming such damages would be bound to prove same through evidence, otherwise, his claim would not be entertainable.

Muhammad Ashraf v. Nawabuddin PLD 1951 Lah. 283 and Muhammad Akram v. Farman Bibi PLD 1990 SC 28 rel.

Malik Gul Muhammad Awan Appellant in person (in HCA No.98 of 2009 and Respondent in HCA No.128 of 2009).

Mrs. Masooda Qureshi for Respondents in HCA No.98 and for Appellant in HCA No.128 of 2009).

Date of hearing: 26th May, 2011.

JUDGMENT

IRFAN SAADAT KHAN, J.---These cross High Court Appeals have been filed against the judgment dated 27-2-2009, passed by learned single Judge of this court in Suit No. 965 of 1998.

2. Briefly stated that facts of the case are that the appellant is running his business in the name of Awan Packaging, manufacturing packing material and corrugated solid board cartons on Plot Nos. 31-32, Sector 81, Bilal Colony, Korangi, Karachi. Due to financial losses, appellant had to close down his business. As he was registered with the Sales Tax Department he applied for deregistration vide letter dated 3-6-1995. He also applied for grant of exemption certificate. For verification purposes the Sales Tax Department visited his premises and found that some material was loaded in his Suzuki Pickup and he was about to leave his factory. The department stopped him and demanded for production of documents in respect of the material. Thereafter Sales Tax Department maltreated the appellant and demanded illegal gratification from him. It is also alleged that appellant was taken to the Head Quarter and was kept there whole ' night and was released in the next morning of 30-8-1995, however, his Suzuki Pickup and other items were confiscated by the department. The department initiated some legal proceedings against the appellant which he responded and the Appellate Tribunal vide its order dated 17-6-1996 directed the department to release forthwith his detained vehicle and raw material, which were then released after a considerable lapse of time and in deteriorated condition

3. The appellant being aggrieved with the attitude of the respondents who had given him mental agony and torture and have totally ruined his business filed a suit for recovery of 81.82 millions as damages against them. The matter thereafter was considered at length by the learned Single Judge, who vide above referred judgment came to the conclusion that respondents were jointly and severally responsible for humiliating the appellant and causing physical and mental injuries to him awarded cost of Rs.1,00,000 to be paid within 30 days of the order failing which appellant would be entitled to claim markup at bank rate from the period of default till the amount is realized. It is against this order that present High Court Appeal has been filed by the appellant.

4. The department has also filed an appeal against the said order stating that the learned Single Judge was not justified in awarding cost to the appellant as whatever action was taken by the department was in accordance with law.

5. Malik Gill Muhammad Awan, the appellant in person appeared before us and submitted that due to mala fide action taken by the respondents he had suffered losses and damages to the tune of approximately Rs.100 million and submitted that the respondents may be made liable for making the payment of this amount as in his opinion the amount awarded to him by the learned Single Judge was too meager. In support of his contentions he has also filed detailed written synopsis.

6. Mrs. Masooda Qureshi, Advocate appeared on behalf of the department and submitted that the appellant was found to be defaulter with respect to the sales tax demand and he was caught red handed by the department while he was transferring unpaid taxable items from his factory in his private Suzuki Pickup to some other place. She stated that mala fide on the part of the appellant is so obvious from the fact that the amount of damages and losses calculated by him was based upon presumptions and assumptions only. She further submitted that no documentary evidence with regard to the alleged losses suffered by the appellant had been attached either with the suit or with the present appeal and the entire amount is nothing but an arbitrary calculation made by the appellant. She submitted that the appellant was involved in deliberate evasion of the sales tax which is why his factory was visited by the department when he was found transferring the goods from his factory. She further submitted that the calculation worked out by the appellant is bogus as on the one hand the appellant has claimed himself to be a poor man and proprietor of a small industry only and on the other hand had claimed damages for the losses etc., running into millions. She submitted that in view of the facts mentioned above not only the present HCA filed by the appellant is liable to be dismissed but the appeal filed by the department may be allowed in view of the fact that the learned Single Judge was not justified in granting damages in the sum of Rs.1,00,000 to the appellant as according to her department had simply performed its duty and no illegal action has been taken by the department in this regard. She, therefore, has prayed that the appeal filed by the department may be allowed by vacating the order passed by the learned Single Judge.

7. We have heard the appellant and the learned counsel for the department at length and have perused the record and the elaborate written arguments filed by them.

8. We have noted that the appellant was a manufacturer of corrugated solid board cartons, he applied for registration under fixed scheme on 18-4-1994 and was granted Sales Tax Registration No.02-17-4819-003-46. After due verification his monthly sales tax liability was fixed at Rs.1316. The appellant paid the said amount up to 30-7-1994 and thereafter fell in arrears. The department thereafter issued notices to the appellant for payment of the arrears but the appellant failed to response. The department thereafter imposed an embargo upon him vide order dated 1-6-1995. The department then received an information that even after the imposition of embargo, the appellant was carrying on business from his factory without paying the due sales tax liability. On 29-8-1995, the Sales Tax Department visited the appellant unit, for enforcement of embargo and found a Suzuki loaded with corrugated solid board sheets leaving the factory without a gate pass or other clearance documents. The said goods and Suzuki were then seized by the staff of the department. Necessary adjudication proceedings were thereafter initiated and a demand of Rs.34478 was worked out as sales tax and a penalty of Rs.5,000 was imposed for violation of sections 35-A and 48 of Sales Tax Act. The appellant thereafter challenged the said order before the Collector, who remanded the matter for de novo proceedings. However the appellant filed an appeal before the Appellate Tribunal, which set aside the order passed by the Collector and directed that the goods of appellant be released forthwith.

9. It is seem from the record and the written arguments that a number of allegations and counter allegations have been raised by both the parties wherein it has been alleged by the appellant that the allegation of sales tax department that he was caught red handed leaving the factory with material was totally incorrect whereas the fact was that he was bringing some material purchased by him from a Kabari of Sher Shah to his factory. He further submitted that sales tax department forcibly took over the said goods and Suzuki without any lawful justification. As per the appellant the manner in which the sales tax department behaved with him could hardly be termed to be a treatment carried out in a civilized society. As per the appellant the department assaulted him and used filthy language against him by calling him by names and forcibly took him to the Head Quarter not only by maltreating him but also manhandling him as well. He submitted that the attitude of the department was so bad that they not only scolded him but also blind folded him and kept him in the Head Quarter whole night and released him in the morning of 30-8-1995 without releasing his Suzuki and the items confiscated by them. The appellant submitted that during this whole period the sales tax department demanded illegal gratification for release of his goods and when the appellant refused to grease their palms. He submitted that during whole such period attitude of department was cruel and malicious. He submitted that all these things were brought to the knowledge of Tribunal, which vide its order dated 17-6-1996 has categorically noted as under ,

"I am seriously disgusted at the treatment meted out by the staff of the department to a respectable and educated citizen of the State. If such people are treated in this manner, I wonder how less educated people would be treated by the department."

10. We have noted that prima facie the 'appellant has made out a case of maltreatment against him and the manner and method in which the appellant was treated by the sales tax department, if true, appears to be an inhumane activity. Be that as it may, if some demands were outstanding against the appellant it does not give the authority and license to the Sales Tax Department to either maltreat or misbehave with a person. The facts as narrated by the appellant, if were true, do not appear to be a proper method to deal with the tax payers in a civilized society. We, therefore, are of the considered view that the learned Single Judge was fully justified in finding the respondents jointly and severally liable for these acts.

11. From the pleadings, it appears that appellant is only aggrieved with regard to the amount of compensation and has no grievance so far as the findings recorded by the learned Single Judge that the government functionaries have taken the law in their hands with mala fides intention. It is seen from the record that awarding of damages has always been a discretionary power of a Court, which is always exercised keeping in view the facts and circumstances of each case. In the present case also, in our view, the learned Single Judge after examining the evidences and thrashing out the entire record and evidences has come to a conclusion and decreed the cost in the sum of Rs.1,00,000. The calculation of damages as worked out by the appellant appears to be quite exaggerated. As the appellant has worked out the damages, special damages to him and his family and special damages to the business suffered due to mental agony and torture running into approximately 100 millions, which is neither supported nor backed by any documentary evidence whatsoever.

12. It is a trite proposition of law that if some damages have been caused to a person the same are to be assessed in the exact amount and proved to this extent. Scanty and the claims based, on no evidence should hardly entertainable. The courts do not decree those types of damages of money as early as possible to the amount of damages suffered by him. It is seen from the claim made by the appellant that this claim is based upon damages and special damages worked out on the basis of expected losses only and without bringing any exact amount of losses sustained by him. It was held in the judgment given is the case of Haji Salman Ali and Co. v. Province of Balouchistan (PLD 1994 Quetta 13) that damages and special damages were required to be proved item wise to the extent of damages allegedly sustained by the claimants. It was further held in the said judgment that plaintiff claiming damages on account of specific losses allegedly sustained by him by act of defendant was required to be proved each item claimed by him separately. Whereas in the instant case it is seen that claims running into approximately 100 millions has been made on the basis of estimates only which in our view could hardly be considered to be the actual losses suffered by him. In our view in absence of such claims it is not possible to hold that the appellant had sustained the losses to the extent claimed by him.

13. It is also a trite law that in such type of cases the onus heavily lies upon the person claming the said damages to make the said claim on I the basis of evidences and when no such evidences are produced these damages are hardly entertainable. We are further fortified by referring the view expressed in the case of Muhammad Ashraf v. Nawabuddin (PLD 1951 Lahore 283) which was quoted with approval by the Hon'ble Supreme Court of Pakistan in the case of Muhammad Akram v. Farman Bibi (PLD 1990 SC 28) as under:--

"Some damage must necessarily have been caused. If we are to assess the damages only if the exact amount is proved, no damages can ever be decreed. Damages have so many times to be awarded by the rule of thumb but the fact that the exact amount is not determinable can be no reason for dismissal of a suit."

14. It is also a settled law that damages for mental torture, nerves shocks, the losses of livelihood for family etc., cannot be measured in terms of money and as no standard or method can be laid down in this regard, the claims are therefore to be worked out on a rational basis and not upon the working submitted by a person. It was held by the Hon'ble Supreme Court in the case of Sufi Muhammad Ishaque v. Metropolitan Corporation Lahore (PLD 1996 SC 737) that "person claiming damages has to prove the same through evidence as general, vague and scanty evidence in that regard cannot be relied upon". It was further held in the said judgment that "damages can be given for nerves shock caused by the sight of an accident at any rate to a close relative". It was further held that "compensation can be granted where a wrong is done to a party and damages flows from that wrong", It was further held that "there could be the exact amount of which cannot be proved. Though damages to be not d awarded by the rule of thumb and under the law person making the claim is legally no yardstick or definite principle for assessing the damages in such cases. The damages are meant to compensate a party who suffers an injury. It may be bodily injury, loss of reputation, business and also mental shocks suffering". In view of the explicit findings given by the Hon'ble Supreme Court of Pakistan we are of the opinion that the appellant had suffered mental shock and agony but the real question is what would be the amount of compensation in this regard? To determine this question it has to be seen that whether a government department entrusted with the collection of taxes can resort to harassing, insulting and torturing the taxpayers illegally for their personal gratification our answer is an Emphatic No. Therefore, despite our above observation we would still levy damages of Rs.1 million only, although we are of the view that it may not be a complete relief for the agony suffered by the petitioner but hopefully will act as a deterrent for the government departments from restraining to such tactics in future. We are of the considered opinion that it would meet the ends of justice if a sum of Rs.10,00,000 (Rupees One Million) as damages are recovered from the respondents jointly and severally within thirty days of passing of this order to be paid to the appellant failing which he would be entitled to claim markup at bank rate from the period of default till the amount is realized. The High Court Appeal filed by the appellant is thus disposed of in the above terms along with the pending application i.e. C.M.A. No.1357 of 2009.

15. So far as the High Court Appeal filed by the department is concerned in view of the findings recorded above the same is found to be frivolous and is hereby dismissed along with the pending application i.e. C.M.A. No.724 of 2009.

S.A.K./G-29/K??????????????????????????????????????????????????????????????????????????????????? Order accordingly.